(USA TODAY) -- Consumers are in a tizzy over Apple's next-generation iPhone, which is expected in October.
The iPhone 5 is expected to pack a larger screen, faster-performing chip and zippier 4G performance. Apple has not yet confirmed plans, but industry analysts have been forecasting lower current generation iPhone sales as buyers hold out for the new one.
Apple reported third-quarter earnings on Tuesday that underscore that a wave of consumers may be waiting for the iPhone 5. The company reported a profit of $8.8 billion, or $9.32 per share, on revenue of $35 billion in the quarter, compared with $7.3 billion on revenue of $28.6 billion a year ago.
The earnings fell short of Wall Street expectations, as the company also reported that iPhone sales in the quarter fell to 26 million compared with more than 35 million in the previous quarter. Analysts had expected $9.8 billion in earnings, or $10.37 per share, on revenue of $37.2 billion, according to the survey of estimates from Thomson Reuters. Apple shares slipped 5% to $571.15 in after-hours trading after the report.
"Our weekly iPhone sales continue to be impacted by rumors and speculation of future products," said Apple CFO Peter Oppenheimer.
Apple reported it also sold 17 million iPads in the quarter compared with almost 12 million in the previous quarter. And Apple sold 4 million Macs in the period.
But iPhones are the company's cash cow. Apple's iPhone generates more revenue, for example, than all of Microsoft's products combined.
Some analysts saw the deceleration in iPhone sales as good news, suggesting pent-up demand for the new model that could translate into blockbuster holiday sales. "Our July survey found 94% of iPhone owners plan on buying another iPhone, suggesting the uptake of iPhone 5 will meet or exceed the high expectations," says Piper Jaffray analyst Gene Munster.
Apple is also expected to launch in October with a smaller version of its market dominating iPad sporting a 7.85-inch screen. The world's most valuable company is moving toward mass production of smaller iPads, according to industry tracker DisplaySearch.
IDC forecasts that by 2016 there will be 222 million tablets shipped worldwide, and 61% of those will be sold by Apple.
Apple's most heated competition for smartphones is from Samsung. The South Korean consumer electronics giant is the No. 1 seller of mobile devices, with about 21% of the market, according to researcher Gartner.
Samsung reported this week that its popular Android-based Galaxy S III phone has sold over 10 million units in less than two months.
Last quarter, Samsung took the mobile device lead from Nokia, which slipped to No. 2, with about 20% of the market. Apple is No. 3, with about 8%. Meanwhile, Google's Android operating system holds about 56% of the market compared with 23% for Apple's iOS.